Pendal Australian Equity Fund aims to provide a return (before fees, costs and taxes) that exceeds the S&P/ASX 300 (TR) Index over the medium to long term. This Fund is designed for investors who want the potential for long term capital growth and tax effective income, diversification across a broad range of Australian companies and industries and are prepared to accept higher variability of returns.
This Fund is designed for investors who want the potential for long term capital growth and tax effective income, diversification across a broad range of Australian companies and industries and are prepared to accept higher variability of returns. The Fund may also hold cash and may use derivatives. Pendal’s investment process for Australian shares is based on our core investment style and aims to add value through active stock selection and fundamental company research. Pendal’s core investment style is to select stocks based on our assessment of their long term worth and ability to outperform the market, without being restricted by a growth or value bias. Our fundamental company research focuses on valuation, franchise, management quality and risk factors (both financial and non-financial risk).
What is Pendal Australian Equity Pendal Australian Equity is an Managed Funds investment product that is benchmarked against ASX Index 200 Index and sits inside the Domestic Equity - Large Cap Neutral Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Pendal Australian Equity has Assets Under Management of 119.62 M with a management fee of 0.79%, a performance fee of 0.00% and a buy/sell spread fee of 0.5%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Pendal Australian Equity has returned 3.52% in the last month. The previous three years have returned 8.44% annualised and 13.01% each year since inception, which is when the Pendal Australian Equity first started.
How is risk measured in this investment product?
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Pendal Australian Equity first started, the Sharpe ratio is NA with an annualised volatility of 13.01%. The maximum drawdown of the investment product in the last 12 months is -3.35% and -41.87% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product?
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Pendal Australian Equity has a 12-month excess return when compared to the Domestic Equity - Large Cap Neutral Index of 1.8% and -0.98% since inception.
Does the investment product produce Alpha over its Peers?
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Pendal Australian Equity has produced Alpha over the Domestic Equity - Large Cap Neutral Index of NA% in the last 12 months and NA% since inception.
What are similar investment products?
For a full list of investment products in the Domestic Equity - Large Cap Neutral Index category, you can click here for the Peer Investment Report.
What level of diversification will Pendal Australian Equity provide?
Pendal Australian Equity has a correlation coefficient of 0.98 and a beta of 0.98 when compared to the Domestic Equity - Large Cap Neutral Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers?
For a full quantitative report on Pendal Australian Equity and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Pendal Australian Equity with the ASX Index 200 Index?
For a full quantitative report on Pendal Australian Equity compared to the ASX Index 200 Index, you can click here.
Can I sort and compare the Pendal Australian Equity to do my own analysis?
To sort and compare the Pendal Australian Equity financial metrics, please refer to the table above.
Has the Pendal Australian Equity been independently verified by SMSF Mate?
This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
How can I invest in Pendal Australian Equity?
How do I get in contact with the Pendal Australian Equity?
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Pendal Australian Equity. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - December 31, 2020 The S&P/ASX 300 Accumulation index rebounded strongly over the December quarter (+13.8%), capping the year’s return at +1.7%. Stronger commodity prices, the iron ore in particular, which gained ~70% over the year propelled returns for Resources (+18.6%/+9.2% Q4/CY20); whereas Industrials (+12.6%/-0.1%) were the laggard.
Covid cases in the US continue to rise and Europe has started to deteriorate again. In the UK concern centres on the rise of cases in London, and the focus has been on a potentially new strain/variant of Covid-19. While it has proven more infectious, there is no evidence to suggest this new strain will make people sicker or is more resistant to vaccines. The latter is critical to market sentiment.
Despite worsening health news and greater restrictions, the economy is holding up better than expected. This is despite softer consumer confidence and shoppers holding back from physical retailers and restaurants. November retail sales, released in December were softer, but real times measures suggest this may have picked up again. Surveys for holiday sales continue to look ok, with a substantial shift to online.
Turning to sector performance, Healthcare (-1.0%) and Utilities (- 5.4%) were the only GICS sectors that recorded a loss over the quarter. In contrast, Financials (+22.8%), Information Technology (+22.8%), Energy (+26.1%), Materials (+15.9%), Real Estate (+13.7%), Communication Services (+12.7%) and Consumer Discretionary (+11.1%) all posted double-digit gains.
The “big four” banks all recoded strong gains over the quarter, ranging from +16.9% (WBC) to 34.2% (ANZ). For ANZ, its latest results revealed some trends that are prevalent within the sector. The good news was the bad and doubtful debts (BDD) provisions were lower, which helped drive a better capital position. However margins were softer and the cost outlook was a bit higher due to the need for investment in technology. Pre-provision profit forecasts were cut by 3-4%. There is a silver lining in that the company acknowledges the outlook for BDDs looks better than feared. This could lead to EPS and DPS upgrade in future years. Elsewhere, iron ore miners, including BHP (+19.9%), Fortescue Metals (FMG, +43.7%) and Rio Tinto (RIO, +20.7%) continued to rise on the back of the strong iron ore price – seaborne iron ore surpassed US$160/mt over the month, a price level that was last seen in 2011. End-of-year restocking, as well as concerns that recommendations on the government inquest into the Juukan Gorge incident may have some impact on supply.
Lastly, Afterpay (APT, +47.5%) and Xero (XRO, +45.7%) were the largest two return contributors within the IT sector. APT provided a trading update for November at the beginning of December, which saw its global underlying sales grow by +112% from last year to A$ 2.1b. The US region recorded sales of 1.0b, exceeding ANZ’s 0.9bn for the first time. Referrals to global retailers also continued to grow strongly with over 35m leads generated during the month of November, which was 147% up on November 2019.
In the same vein, XRO delivered a good result in November. New subscriber growth softened in the US and UK, in line with expectations given the challenges in attracting new customers during the Covid period. However, there was stronger than expected subscriber growth in Australia – and particularly in New Zealand – which was surprising given that these are already heavily penetrated markets. This may suggest a further post-Covid shift in mentality towards the importance of online cloud-based accounting. There were also constructive signals around the development of the broader platform and ancillary services.
Performance Commentary - September 30, 2020 The market’s initial reaction to NEC’s (+28.0%) results was negative given a worse than expected update for TV ad numbers in July. However signs of improvement are coming through, while the result delivered good cash flow. Potential structural improvements in revenue – from Stan subscriptions and social media payments – coupled with cost out, place NEC in a good spot when the cycle improves, which is where the market expectation is at currently
Lower input costs and improvements in the US housing market have been providing cyclical tailwinds for the sector, which saw the likes of James Hardie (JHX, +20.4%) continue to outperform. In addition, investor sentiment has also been supported by the expectation that any housing-related stimulus in response to current economic conditions will also directly benefit the sector
IAG (-24.1%) preannounced its FY20 result in July, stating that net profit after tax (NPAT) was likely to be less than half that of FY19. While management are confident that they won’t face a flood of business interruption claims from Covid, they did increase provisions against the knock-on effects. Given this, they will also not pay a final dividend for FY20.
Afterpay (APT, +31.2%) continued its relentless re-rating, driven mist recently by the acquisition of small European and Asian businesses which are being factored into a material uplift in “total addressable market (TAM)”. The result itself was mixed; gross margin was good but there were some signs of momentum slowing in US – this could be a significant issue in next 3 months. The company also pulled back somewhat in September following the news that PayPal is releasing a buy now pay later (BNPL) option as part of its existing service to customers. We continue to prefer Xero as our growth exposure.
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